A battle of the National Basketball League billionaires – including one with close ties to Donald Trump – has broken out on the eve of the league’s biggest game of the season, with a prominent club owner agitating for a hostile takeover of the league from majority owner Larry Kestelman.
Brash Illawarra Hawks owner Jared Novelly has circulated an email to the nine other team owners – including those of Melbourne United, South East Melbourne Phoenix and the Sydney Kings – declaring he will launch “multiple actions” against NBLCo by the end of the month, with an attached draft term sheet proposing Kestelman sell all his shares equally among the league’s 10 teams.
Under fire: NBL boss Larry Kestelman has been urged to step down by the Illawarra Hawks owner.Credit: Getty Images
However, Kestelman was emphatic in his response on Friday.
“We remain fully committed to the continued and unprecedented growth and success of the NBL,” Kestelman said in a statement.
“The NBL is not for sale.”
This masthead was given a copy of Novelly’s email, in which the American states: “I am taking one last shot to try to allow the current ownership to leave peacefully while saving face and reputation”.
Novelly says he has concerns about “secret ambassador agreements, gambling revenue, the sale of the JackJumpers, integrity concerns and financial transparency”, and cites a KPMG Report that “reveals that there is a history of NBLCo calculating the club distribution incorrectly, the significant profits made by LK Group companies from NBL-related activities, discrepancies with related party transactions and opaque procurement processes which benefited LK Group entities”.
Novelly, the son of Apex Oil mogul Paul Novelly, who passed away in February, took control of the Hawks in 2020. He was announced as the next ambassador to New Zealand and Samoa by United States President Donald Trump in January.
Kestelman, a Ukrainian-born, Australian businessman, has been the majority owner of the NBL since 2015.
A hostile takeover bid of the NBL comes as the Illawarra Hawks do battle with Melbourne united in the NBL grand final series.Credit: Getty Images
The explosive email comes just days ahead of Sunday’s deciding game five of the NBL’s finals series between the Hawks and United in Illawarra and, at a time, when the stunning growth of the league has led to several franchises now being publicly valued at more than $35 million each.
Under his plan, Novelly suggested the 10 teams would purchase all shares of NBLCo. Nine teams would provide $1 million each, with this lump sum given to Kestelman, who would also retain the proceeds of the recent sale of the Tasmania JackJumpers.
The new venture would be called LeaguesCo, and would buy the league through a special purchase vehicle – that being a separate entity – in which each team has a director on the board.
“I apologise if this initiative offends you. That is very far from my intent, but I’m not willing to let the status quo continue, and I see this as a reasonable path forward,” Novelly said.
Novelly said the revenue from any sale of expansion licenses would be split evenly among LeaguesCo and the league’s teams. The NBL is currently debating expansion, with a second Sydney team, and new entities on the Gold Coast and in Canberra a possibility.
While Novelly wants Kestelman to cede power, he said he still wants Kestelman recognised for saving the league. This potentially includes “providing Larry with an ongoing position (such as honorary president) or naming a trophy or any future in-season tournament after Larry”.
“We consider that this would be a gesture of good-faith that would allow us and Larry to manage the public perception of the transaction,” Novelly said.
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